Entering text into the input field will update the search result below

CyrusOne: Solid Mid-Cap With Management Turmoil And Possible M&A

Oct. 01, 2021 8:43 AM ETCyrusOne Inc. (CONE)DLR, EQIX22 Comments


  • CyrusOne is in solid shape financially.
  • However, management is in turmoil, and growth prospects are slowing.
  • It is no rumor: CyrusOne management has gone looking for a buyer.
  • Whether they will find one or not remains to be seen.

Big fish eats smaller one

KaeArt/iStock via Getty Images

Meet the Company

CyrusOne (NASDAQ:CONE) is a REIT that specializes in enterprise-class, carrier-neutral data center properties. The company seeks to grow by building new centers swiftly, and by providing scalability and reliability for their customers. With more than 50

This article was written by

Philip Eric Jones profile picture
I am a teacher, writer, recording artist, and inspirational speaker, who never had much money to invest for most of my life. Then I inherited a sizable sum of money at age 62, and soon found myself on a fascinating journey of making the most of the opportunity my parents have given me. I write of things I have discovered, in the hopes that my thoughts and discoveries may be of help -- or at least amusement -- to others. Promoting Author for Hoya Capital Income Builder. 

Analyst’s Disclosure: I/we have a beneficial long position in the shares of EQIX, DLR, CONE, COR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (22)

good article.. the cone/spy pair has sharply rebounded from all time low (cone underperform) set in july.. on absolute basis close above 84.99 confirms ... independent third party valuation has fair value near 78 withing 62-94 range..
Matthew Utesch profile picture
Thanks for the call-out. After the most recent earnings those top-end estimates are starting to look entirely realistic.
Matthew Utesch profile picture
@Philip Eric Jones

Wasn't quite as high as I'd hoped for the buyout. The problem now is trying to find a good place to redeploy the cash.
Philip Eric Jones profile picture
@Matthew Utesch I’m seeing a lot of good opportunities, so I got out a while back. My problem is choosing which ones to bite on
Nice move today.. Any new rumors circulating?
Would be fantastic to be able to cash out nicely before y.e.
Philip Eric Jones profile picture
@crayfishx4 News item today from Benzinga: "Cowen Says CyrusOne Likely To Be Acquired Soon At Between $85-$90/Share" No specifics on who the prospective buyer is, nor on how that guesstimated price was determined.
@Philip Eric Jones That doesn't seem like much of a premium. Their current enterprise value is close to $12.9B, or about $104/share.
@Philip Eric Jones Well $85 won't work for me, but at $90 I'm happy to sell 70% of my position.. Limit order is in and fingers crossed someone wants them! Long term I prefer remain invested in DLR only - a much larger position for me..
NoITAll2000 profile picture
Article ignores possibility of either a private equity buyer or possibly Iron Mountain (IRM). IRM ‘s market cap is a bit larger than CONE’s so it would be a merger of equals financially with the CONE acquisition realizing IRM’s ambition to be one of the top data center players. IRM’s superior management team would allay the “management turmoil” concerns which have swirled around CONE. There probably would be certain synergies as well. At a minimum IRM has future unused capacity. And together they would dominate the European market giving them more pricing power.
I haven’t crunched the numbers but a stock for stock deal by IRM might be at least neutral and possibly accretive to earnings. But it would certainly boost the multiple given to IRM by transforming their identity and overcoming concerns about the long-term decline of their legacy business.
Philip Eric Jones profile picture
@NoITAll2000 Your thesis would make a good article, if you care to crunch the numbers. There is a loose word limit of 2500 on a Seeking Alpha article, so I can't cover all the possibilities, and would not have the expertise to do so anyway. If CONE is to be acquired, it does not have to be by another REIT, as the QTS acquisition by BX showed. Thanks for adding your thoughts.
I hope Blackstone avoids this one.
Philip Eric Jones profile picture
@user1416 Why do you say that? Do you hold BX?
@Philip Eric Jones They have been looking for a buyer for a long time and just about everyone has passed. I do like Blackstone's acquisition of QTS and if they were to buy another datacenter, I would rather see them acquire COR which is network dense. Another option in datacenters is to acquire those owned by the telcos. Equinix has been buying the DCs of Verizon and T. At present, I hold BX and EQIX.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.